Technical Trading Mastery : How to Win with Simplicity by Chris Vermeulen by Chris Vermeulen - Read Online

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Technical Trading Mastery - Chris Vermeulen

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CHAPTER 1

INTRODUCTION

When I was 16, I found a booklet in the mailbox about how fortunes could be made trading the futures market, and it immediately intrigued me. It was written by a guy I’d not yet heard of, Larry Williams. Yet even as a kid I already loved the feeling of making money, and I was great at working with numbers. On top of that, I also loved the adventure of taking measured risks, so when I saw the book, I devoured it.

I read that booklet four times before I approached my dad and asked him if we could start trading futures together. He wasn’t interested in this type of business because he had his own successful businesses already, but he was supportive. He told me to learn more and go from there. I did, and I got bit by the trading bug, big time.

When I went to college, I started and ran my own successful landscaping business every summer, and I started saving that money to start trading.

I became addicted to watching the stock market on CNBC from my dorm room and learned more and more about trading. It fueled the fire, and on the day I turned 18, I asked my dad to co-sign on a trading account with $2,000 I had saved up over the summer. A week later I was ready to rock and roll and trade from my dorm room!

Just a couple of months later, I had turned $2000 into $8000 (trading stocks because I was not approved for futures yet, nor did I have the money required for it), and I was on my way. I knew I’d found my passion and purpose.

What about you?

WHY ARE YOU READING THIS BOOK?

Chances are you already know a bit about trading and are ready to understand the technical aspects of it. Or maybe you’re already somewhat of an expert and want to learn more.

Understanding what drives you will help you establish your goals and outcomes. We seek to learn because we want something. Maybe it’s the challenge of achievement or maybe it’s the joy of seeing profit or building something, or perhaps it’s as simple as watching your bank account grow. Having wealth is power because it gives you freedom. But creating wealth is even more powerful.

My journey evolved from learning to executing trades and continually researching and perfecting the technical aspects of the process. But on each step of the way, I was interested in understanding more because I was passionate about trading.

In 2001 I started sharing my trades and analysis online because other traders told me I had great analytical skills and a gift for mentoring. Now my journey continues with TheTechnicalTraders.com INNER-Market Analysis Signal Tools, a system derived from years of trial and error, experience, and various processes and methodologies. I decided I wanted to share what I’ve learned with others in order to help them be successful at trading.

WHAT’S YOUR GOAL?

For me, trading offers freedom. I grew up in an entrepreneurial family, where both parents had their own businesses and worked hard at being the best and staying on top of their game. If you’ve ever been an entrepreneur, you know that sometimes you win and sometimes you lose, but your destiny is always in your own hands. You’ve got what a lot of other people don’t have—independence.

As a result of my parents owning their own businesses, we were able to travel, go on extravagant vacations and spend a lot of time together as a family.

Maybe you want to have the freedom of owning your own business, or perhaps you just want to set aside some money to learn the business of trading. Or perhaps you really want to grow your nest egg and earn money for something big. Either way, the information in this book is designed to get you up to speed on trading in the shortest time frame possible.

In my career as a full time trader and coach, I’ve met traders that were confused by all the different investment vehicles, tools, and indicators available. They had all the knowledge they needed, but no one told them how to apply it to themselves and real trading. But application (action) makes the difference. It’s the difference between winning and not doing anything at all! What’s knowledge if we don’t use it?

I’ve been trading and coaching others how to trade for years, and freedom was a big driver in my motivation for entering the business. I wanted to be free to work from home, an island, or a mountain. I wanted to avoid offices and suits. I wanted to avoid bosses who would require things of me that I didn’t feel inspired to do. I just wanted independence.

I started watching stock quotes, and I realized how big the profit potential was if I could just cut out a small piece of the markets’ movements each month. I knew there would be obstacles to conquer, however, in order to achieve success consistently.

In the pages to follow, I’ll teach you how to keep it simple.

Personally, I don’t think trading needs to be complicated. Keeping things simple is the key to repeatable success. I’ve studied many of the world’s top traders, and they only use a few basic strategies in combination with simple tools and indicators.

This does not mean trading is simple. There is a lot of room for failure when it comes to self-discipline and trade execution. There isn’t any trading method that’s 100 percent bullet proof. All systems and strategies have losing trades, but through the years our process is replicable and effective. It has taken several individuals to exciting new levels in their trading!

My goal in this book is to bring you a solid understanding of market dynamics so you can use my proven strategy or develop your own based on a comprehensive understanding of market structure and how it moves. Any strategy based on a thorough understanding of market tendencies should provide a disciplined trader with profits. I will help you figure these things out and get you trading like a pro as quickly as possible.

The most effective way to become successful as a trader is to learn directly from someone who has already made the mistakes and been through the struggle!

BE A MASTER, IN JUST A MATTER OF MONTHS

In 2001 I started sharing my market analysis online through an email newsletter, which fast-tracked a trader’s learning curve from beginner to advanced within a few months.

In 2008, I decided I wanted to make the learning curve of reading the markets through the use of technical analysis even easier, faster and more automated!

I had lived and breathed trading, studied strategies and implemented them with success. Now it was time to develop a way to help others do the same thing.

After countless hours of analysis, and with the help of multiple programmers to help convert my knowledge, expertise and strategies into a real-time automated technical analyst, I was on my way. I created a system that I use today, and it works.

The system does all the time-consuming number crunching so that an individual can accurately identify the current market trend. It shows when prices are overbought or oversold, spots trend reversals, identifies sideways choppy markets, and actively pinpoints short-term highs and lows. It does this all while providing trading advice like position sizes based on the market volatility, entry signals (long or short), profit-taking levels, and protective stops.

When you use the tools inside these pages, you’ll learn things like how to anticipate the markets entry and exit points ahead of others. You’ll learn how to get skilled at recognizing market movements, and how to utilize technical analysis to fuel your trading strategy.

You don’t need to know and trade everything. The key is to find a few simple strategies that work for you and master them. Knowing what strategy is best for you is critical for success, as it must fit with your personality, available time, self-discipline and current knowledge of the financial market. Read on, and enjoy the journey!

THE TRADERS LITMUS PAPER TEST

Answer the statements below using a Yes or No answer. Add up the total number of Yes answers at the bottom.

•  Do you have a detailed trading plan to work from?

•  Clear set-up criteria for each trade and adjustment?

•  Are you tired of watching your account decline during market down turns and bear markets?

•  Do you have a detailed investment plan to work from?

•  Use a hard protective stop for every trade?

•  Have trading rules you don’t stick too?

•  Do you have a routine that gets you back on track when you’re trading is off?

•  Do you lack the preparation for your trading day?

•  Do you not keep track of all your trades?

•  Do your losing trades typically outweigh your winners?

•  Do you have having several winning trades, followed by larger, crash and burn types of trades?

•  Do you experience hesitation, apprehension, uncertainty or fear when you are about to trade?

•  Do you double down after a losing streak or when you’re losing to regain profits faster?

•  Have you ever gone into the I don’t care mode and watched your money disappear when in a trade?

•  After losing a large amount of money, are you emotionally challenged on every trade after that loss?

•  Were you successful in another profession and find trading is affecting your confidence and ego?

•  Do you lose sleep over your trading?

•  Do you see your trade set-up and still hesitate to enter?

•  Are you exiting a trade too quickly instead of waiting for the trade to mature to its full potential?

•  Are a high percentage of your trades defensive?

•  Do you logically know what to do in a trade but find you are not taking the actions you should?

•  Do you have anxiety when trading and enter too soon?

Total the number of Yes’s__________

IF YOU HAVE MORE THAN SIX YES ANSWERS, THEN YOU NEED A TRADING PHILOSOPHY, A TRADING BUSINESS PLAN, AND NEW TRADING STRATEGIES. THIS BOOK WILL HELP YOU ACCOMPLISH EACH OF THESE THINGS.

CHAPTER 2

UNDERSTANDING YOUR GOALS

When you begin trading, there are a lot of questions. And with all the information out there, it can be hard to filter through and decide where to start. Setting goals can help, but often novice traders set the wrong type of goals. Your initial goals should be based on things to help you learn to eventually make money. But making money, however, should not be the main goal.

Instead, opt to make your initial goals about learning the process and emulating traits of successful traders. In order to become successful at trading, understand who you are. Are you an investor? A swing trader? A momentum or day trader? These are all of the things I’ll help you discover in the chapters to follow. Understanding your goal is the first step to achieving it.

Once you do, you can master the trading strategy and rules that fit your personality and style of trading. Only then will the money and profits follow!

MAKE YOUR GOALS ABOUT THE PROCESS, NOT RESULTS

Initially, traders want to make goals about numbers. They generally make statements like: I will make 1 percent per day on my $30,000 capital as a day-trading example, or I will make 30 percent per year as an investing example. In the beginning, I probably made the same bold statements. I went through the frustrating process of learning the